THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 12/14/2016 GAIN Report Number: NL6037 Netherlands Retail Foods The Dutch Food Retail Market Approved By: Susan Phillips Prepared By: Marcel Pinckaers Report Highlights: The Dutch retail sector is characterized by heavy consolidation, the top two retailers control over 50 percent of the market, and a large number of smaller neighborhood stores. Consumers are increasingly looking for sustainable or organic products and more ready-to-eat meals and convenience products. For 2016, the turnover is expected to increase further due to the improving economy in the Netherlands and greater confidence in the economy among consumers. 1 SECTION I. MARKET SUMMARY Dutch Food Retail Market Approximately 80 percent of the Dutch food retail outlets are full service supermarkets, operating on floor space between 500 and 1,500 square meters located downtown and in residential areas. Retailers with full service supermarkets have responded to the need of the Dutch to have these supermarkets close to their homes. The remaining 20 percent includes mainly convenience stores (near office buildings, city center, motorways and train/metro stations), some wholesalers and just a few superstores (conveniently located in shopping malls and industrial parks). Top two food retailer formulas in the Netherlands, Albert Heijn and Jumbo, have a market share of 52 percent. The market of German discounters Aldi and Lidl combined has increased to 17.3 percent. Independent food retail stores are increasingly leaving the scene. Shrinking margins and on-going consolidation in the retail market drive this trend. Table 1: Market Shares of Leading Food Retailers, 2015 Company: Market share, percentage: Albert Heijn 35.1 Jumbo 17.4 Lidl 10.0 Aldi 7.3 Plus 6.2 Dirk 3.8 Coop Supermarkten 3.0 Deen 2.2 Hoogvliet 2.2 Dekamarkt 1.9 Spar 1.7 Vomar 1.6 C1000 1.1 Other 6.5 Total 100.0 Source: www.distrifood.nl In 2015, the turnover of the Dutch food retail industry totaled € 35.9 billion. For 2016, turnover is expected to increase further due to the improving economy in the Netherlands and greater confidence in the economy among consumers. Table 2: Turnover Dutch food retail, billion Euros 2011 2012 2013 2014 2015 32.2 32.6 33.3 34.3 35.9 Source: www.gfk.nl Trade In Food Products The Dutch food market depends heavily on both imports and exports. Although total imports decreased, imports from the United States increased. Last year, the Netherlands imported USD 30.3 billion of consumer-oriented products, about a third came from neighboring Germany and Belgium. After Brazil, the U.S. is the second largest non-EU supplier of Consumer-Oriented products. In 2015, U.S. exports totaled USD 1.2 billion, dominated by food preparations, tree nuts, wine and beef. U.S. exports of Consumer-Oriented products grew by two-thirds over the last 5 years. 2 Table 3: Value of imports of Consumer Oriented and Fishery products, past 5 years, million USD 2010 2011 2012 2013 2014 2015 Netherlands: Consumer Oriented Products Total imports: 26,462 29,298 29,576 31,292 32,803 30,327 Imports from U.S.: 735 840 844 976 1,134 1,231 Fishery Products Total imports: 2,654 3,055 3,023 3,067 3,560 3,062 Imports from U.S.: 88 98 95 104 121 140 Source: www.gtis.com For fishery products the Dutch market also depends on imports. Last year, the Netherlands imported USD 3.1 billion of fishery products. Iceland is the largest supplier; the U.S. is the 7th largest non-EU supplier of fishery products. In 2015, U.S. fish exports totaled 140 million, dominated by frozen fish fillets for further processing, cod, scallops and salmon. Table 4: The number and type of retail outlets in the Netherlands Type of outlet: Number of Stores: Average floor space (M2): Convenience Stores 700* <500 Supermarkets 3,624 500 – 1,500 Superstores 99 1,500 – 5,000 Wholesalers 100* >5,000 Source: Distrifood Retailplanner 2015/2016 *FAS The Hague estimate Demand for Sustainable Food Products Is Up During the last decade, Dutch food retailers have increasingly sourced food products which are either produced sustainably or obtained in a sustainable manner. The Dutch government published annually a report, “Monitor Duurzaam Voedsel”, which gives an overview of consumer spending on sustainable food in the Netherlands. Sustainable food is the most important growth markets in food retail and foodservice markets. The turnover of sustainable food in 2015 totaled € 3.0 billion, up by 12 percent. The market share for sustainable food grew last year from 7 to 8 percent. The “Monitor Duurzaam Voedsel 2016”, detailing the 2015 figures, can be found here. Private Label Products The market share for private label products continues to increase in most European markets. The largest market shares are to be found in the Western European countries, led by Spain (51 percent), the U.K. (45 percent) and Portugal (45 percent). Belgium and the Netherlands had a market share of 41 percent and 29 percent, respectively. Market shares in the Nordic region and most of the Central and Eastern European countries are between 30 percent and 35 percent. The market share of private label is high in retail markets that are highly consolidated and innovative. Several retailers in the Netherlands market have developed two private labels; one focusing on price whereas the other is aiming at adding value. Consumers are discovering the good value for money that private label brands are offering; they can be a good alternative for A-branded products. Private label seems to fare well not only in years of recession but also in more prosperous times. The profitability of private label products has fueled retailers’ interest to offer more private label products (e.g. gluten-free, healthy, and organic) and move into other areas of private label (e.g. bakery and cosmetics). The on-going 3 expansion of local and international discounters continues to boost the growing market for private label products as well. The largest trade show for the Private Label industry takes place in Amsterdam, the Netherlands. Every year around 15 U.S. companies exhibit at the Amsterdam PLMA fair which is scheduled for 2017 on May 16 and 17. In 2015, SUSTA had a pavilion featuring 6 companies. Please contact our office in The Hague, the Netherlands for more information about the show and check if your commodity cooperator or State Regional Trade Group is planning on participating. On-Line Shopping Offers Potential The market for shopping on-line as a percentage of the total food retail is still small at the moment (an estimated 1 percent) but expected to grow. According to industry contacts, it is this part of the market which offers great potential. Within Europe, the largest market for on-line shopping of food products can be found in the U.K. In the Netherlands, Ahold’s Albert.nl acquired market leader Bol.com to further tap into the on-line shopping market. DeKa drive (shop-online and pick up groceries 7 days a week at the DeKa drive, www.dekadrive.nl) recently announced it plans to open more DeKa drives within the next few year. Consumers in the age group 18- 44 years shop most on-line driven by saving time and money. Key though for on-line shopping is a high quality on-line experience and a reliable delivery of the purchased goods. Shopping by using smart phones and tablets has boosted in the past five years. Blurring Boundaries Especially in the cities, consumers are shopping at different times and locations. Breakfast is often bought on the way to work. During lunch breaks, people decide what they like to eat for lunch and buy it on the spot. Dinner is increasingly bought on the way to home. As a result innovative convenience stores, either small independent or part of a larger chain, are opened near metro/train stations, schools, office buildings and shopping malls. The traditional neighborhood grocery stores are, in order to survive, offering more and more meal components and ready-to-eat meals. Consumers request regional cuisine products (Asian, Italian, Tex-Mex, etc.) and overall tasty and fresh food. These new convenience stores are in fact not so much competing with traditional supermarkets but more so with foodservice outlets like La Place, Kentucky Fried Chicken, HEMA, Starbucks, Kiosk, McDonalds, etc. Awareness Of Health And Well-Being Consumers are becoming more aware of and are more concerned about the effects food has on their health and well-being. There is a trend to a healthier lifestyle in Western countries. The following U.S. industries have all benefitted from this trend: healthy food snacks (the ‘free from, low on and rich in’ products), nuts (pistachios, almonds, walnuts, etc.), so-called super fruits (cranberries, pomegranates, other berries), seafood products (salmon, halibut, etc.) and legumes (beans and lentils). Consumers are looking for and finding more information on this topic; the media, including the Internet, TV and magazines, respond to this desire and feed into it. Bloggers and Vloggers are rapidly gaining power in influencing consumers. Food processors and retailers play a crucial role as well, as they develop and market food products to create, anticipate and meet consumers’ needs. Table 5: Advantages and Challenges of the Dutch Food Retail Market Advantages Challenges Sector Strengths & Market Opportunities: Sector Weaknesses and Competitive Threats: Turnover figures indicate that the Dutch retail market is solid and EU import regulation and tariffs.